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Morning Commentary: LatAm spreads open a little weaker; investors eye Brazil’s reform measures
By Rebecca Melvin
New York, Dec. 14 – Emerging market spreads opened up a little weaker early Thursday with some volatility in Brazilian credits as market players eye conflicting reports of when the vote on a major overhaul of Brazil’s pension system will be held, a New York-based trader said.
“In general, spreads opened up a little wider. People are watching the reform measures in Brazil, so it’s volatile but a little weaker,” the trader said.
There is uncertainty over when the pension reform bill vote is going to be held after a Senate leader said on Wednesday that the Brazilian Congress vote has been postponed to next year. But cabinet ministers said they expect the measure to be voted on next week.
Reuters reported that one senator said Temer did not have the necessary votes in the lower house to support the measure. But finance minister Henrique Meirelles said the government was still working toward holding the lower house vote next week and that the senator was only “expressing his opinion.”
The pension overhaul is considered vital to president Michel Temer’s efforts to bring Brazil’s budget deficit under control and expectations of its passage have supported financial markets.
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